Abstract

http://ssrn.com/abstract=2476950
 


 



Regulating Trading Practices


Andreas M. Fleckner


Max Planck Institute for Comparative and International Private Law

August 6, 2014

The Oxford Handbook of Financial Regulation, ed. by Eilís Ferran, Niamh Moloney, Jennifer Payne, Oxford University Press, Forthcoming

Abstract:     
High-frequency trading, dark pools, front-running, phantom orders, short selling — the way securities are traded ranks high among today’s regulatory challenges. Thanks to a steady stream of news reports, investor complaints and public investigations, calls for the government to intervene and impose order have become commonplace, both in financial and academic circles. The regulation of trading practices, one of the oldest roots of securities law and still a regulatory mystery to many people, is suddenly the talk of the town. From a historical and comparative perspective, however, many of the recent developments look less dramatic than some observers believe. This is the quintessence of the present chapter. It explains how today’s regulatory regime evolved, identifies the key rationale for governments to intervene, and analyzes the rules, regulators and techniques of the world’s leading jurisdictions. The chapter’s central argument is that governments should focus on the price formation process and ensure that it is purely market-driven. Local regulators and self-regulatory organizations will take care of the rest.

Number of Pages in PDF File: 52

Keywords: securities trading, standardization, self-regulation, state intervention, price formation, price discovery, market efficiency, financial stability, investor pro-tection, algorithmic trading, short selling, market fragmentation

JEL Classification: D4, D53, F3, G1, G18, G2, G23, G24, G28, H1, K2, K22, L1, L5, N2, N20, N4, N40

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Date posted: August 8, 2014  

Suggested Citation

Fleckner, Andreas M., Regulating Trading Practices (August 6, 2014). The Oxford Handbook of Financial Regulation, ed. by Eilís Ferran, Niamh Moloney, Jennifer Payne, Oxford University Press, Forthcoming. Available at SSRN: http://ssrn.com/abstract=2476950

Contact Information

Andreas M. Fleckner (Contact Author)
Max Planck Institute for Comparative and International Private Law ( email )
Mittelweg 187
D-20148 Hamburg
Germany
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